\N 

itfise hmm hart, 1.1 
yiX-lSD. 

JAN 8 1913 



JAMES H. McKENNEY, 

6L0HK- 



Supreme Court of the United States 


October Term, 1912. 

No. 172. / ^ 

' Jj" ■ 

ISIDOR STRAUS and* another compos**^ the 
firm of R. H. Macy & Co ^ 

Plaintiffs cwC, Plaintiffs-m-Error i 


vs. 

AMERICAN PUBLISHERS'’ ASSOCIATION, 
et al. f 

Defendants and Defendcmts-m-Error. 


BRIEF ON BEHALF OF THE DEFENDANTS 
IN ERROR 


JOHN G. MILBURN, 
STEPHEN H. OLIN, 


Olin, Clark & Phelps, 

Attorneys for Defendants-in-Error, 

34 Nassau Street, New York City. 


Of Counsel. 



Chas. P. Young Co., Printers, 19 Beaver St., N. Y. 














INDEX 


Pag t 

I. Point in reply to plaintiffs’ points on motion to dismiss. 2 

A. Plaintiffs’ admission as to copyright question.. 2 

B. Plaintiffs’ admission as to the question raised 

on the appeals. 3 

C. Authorities cited by plaintiffs distinguished... 6 

D. The Sherman Act, even if it rendered the 

agreement void, would not be applicable in 

this suit . 9 

II. Statement of argument . 11 

1 st Point. Refusal to apply Sherman Act was not 

error . 13 

A. Because that act will not sustain a recovery 

in a State Court . 13 

B. Because the act is not applicable in an equity 

suit not brought by the Attorney General... 17 

C. Because the federal and state anti-monopoly 

statutes are not applicable to the same sub¬ 
ject-matter in one action. 18 

D. Because the complaint did not allege facts 

showing restraint or monopoly of interstate 

commerce. 20 

2 nd Point. It was not error to dismiss the suit as 
to copyrighted books, because 
i A. The plaintiffs did not come into Court with 

j clean hands and their dealings with defend¬ 
ants’ copyrighted books were. 23 

(a) monopolistic . 24 

( b ) injurious to the defendants and 

their customers . 25 

(c) fraudulent to the public. 28 

B. The plaintiffs suffered no legal damage by 

, reason of the agreements and acts com¬ 
plained of . 31 

3 rd Point. It is lawful for a publisher when selling 
his copyrighted books at wholesale to 
fix by agreement the retail price at 
which such books may be sold during a 

period of one year. 36 

4 th Point. The agreement of the American Pub¬ 
lishers’ Association was not in viola¬ 
tion of the Sherman Act. 51 

5 th Point. An answer to the brief of plaintiffs in 

error . 61 

















11 


Page 

A. The statement of facts. 62 

B. Point I . 62 

C. Point II . 64 

D. Point III . 65 

6 th Point. If the writ of error is not dismissed the 

judgment should be affirmed. 66 

INDEX OF AUTHORITIES. 

Allen vs. Alleghany Co., 196 U. S., 458, 465. 22 

American Livestock Com. Co. vs. Livestock Exchange, 143 

Ill., 210 . 55 

Anderson vs. U. S., 171 U. S., 604.52, 60 

Aronson vs. Baker, 43 N. J. Eq., 365, 369. 44 

Arthur, et al., vs. Oakes, 63 F., 310. 66 

Ashley vs. Rocky Mountain Bell Tel. Co., 25 Mont., 286. 34 

Authors & Newspapers’ Ass’n vs. O’Gorman Co., 147 F., 

616, 621 . 32 

Bement vs. Harrow Co., 186 U. S., 70.7-8, 13, 14, 38, 47, 48 

Bobbs-Merrill Co. vs. Straus, C. C. A., 147 F., 15, 23. 44 

Bobbs-Merrill Co. vs. Straus, 210 U. S., 339, 348_3, 40, 45, 48 

Bradt vs. Krank, 164 N. Y., 515, 519. 22 

Brightson vs. Claflin Co., 180 N. Y., 76, 81. 22 

Brown vs. Weir, 95 A. D., 78. 34 

Callaghan vs. Myers, 128 U. S., 617. 42 

Central Coal & Coke Co. vs. Hartman, C. C. A., Ill F., 96... 31 

C. B. & Q. Railway Co. vs. Illinois, ex rel., Drainage Com¬ 
missioners, 200 U. S., 561. 6 

Comstock vs. Johnson, 46 N. Y., 615. 23 

Constitution, Art. 7, Sec. 8 . 39 

Cooper vs. Stephens [1895], 1 Ch. Div., 567. 45 

Copyright Law, Secs. 1 , e, 2 , 6 , 7, 25 (e), 31 proviso. 41 

Daly vs. Webster, 56 Fed., 483, 488, C. C. A. 43 

Dewey vs. Des Moines, 173 U. S., 193. 66 

Doan vs. Am. Book Co., C. C. A., 105 Fed., 772, at foot p. 776. 43 

Dobbins vs. Duquid, 65 Ill., 464. 34 

Dr. Miles Medical Co. vs. John D. Park Sons & Co., 220 

U. S., 373, 405. 49 , 56, 57 , 58 

Drone on Copyright, 383; 387-399, 443, 467; 365;.41, 42 , 43 

Eddy on Combinations, Vol. I, Sec. 329. 25 

Edison Phonograph Co. vs. Kauffman, 105 F., 960. 38 

Edison Phonograph Co. vs. Pike, 116 F., 863. 38 

Fetrid/ge vs. Wells, 4 Abb. Pr., 144. 23 

Fetridge vs. Wells, 13 How Pr., 385, 3§8 . 30 

Fonotipia, Ltd., vs. Bradley, 171 F., 951, 959 . 55 

Freeman vs. Grant, 132 N. Y., 22 , 29. 22 

French vs. Vining, 102 Mass., 132. 34 

Gilmore vs. Anderson, 38 F., 846. 40 




































Ill 


Page 

Greene Bay & Miss. Canal Co. vs. Pallen Paper Co., 172 

U. S., 58. 7 

Greer Mills & Co. vs. Stoller, 77 F., 1. 18 

Hamilton vs. McPherson, 28 N. Y., 72, 76, 77. 34 

Hamilton Co. vs. Massachusetts, 6 Wall., 632. 6 

Harding vs. Illinois, 196 U. S., 78.6, 7, 9 

Harper Bros. vs. Donohue, 144 F., 491, 492. 42 

Harper vs. Ranous, 67 F., 904. 42 

Heim vs. N. Y. Stock Exchange, 64 Misc., 529, 31. 55 

Henry vs. Dick Co., 224 U. S., 1.38, 41, 48, 49, 64 

Hopkins vs. U. S., 171 U. S., 578. 52 

Hudson vs. Patten, 1 Root (Conn.), 133. 43 

Joseph vs. Sulzberger, 136 A. D., 499, 508. 35 

Kipley vs. Illinois, 170 U. S., 182, 187, 188, 189. 22 

Kipling vs. Putnam, 120 Fed. Rep., 631, 634, C. C. A. 41 

Lawrence vs. Porter, 63 F., 62. 34 

Layton vs. Missouri, 187 U. S., 356. 22 

List Pub. Co. ,vs. Keller, 30 Fed., 772. 42 

Locker vs. Amer. Tobacco Co., 121 A. D., 443, 458, affirmed on 

opinion below, 195 N. Y., 565.10, 16 

L. & N. R. R. Co. vs. Sullivan Timber Co., 138 Ala., 379.... 34 

Macgillivray on Copyright, 281, 282. 42 

Manhattan Medicine Co. vs. Wood, 108 U. S., 218, 227. 23 

Marshall Co., Ltd., vs. Bull, Ltd., 85 Law Times Rep., 77, 82. 45 

Message of the President to Congress, Dec. 5, 1911. 25 

Michigan Pipe Co. vs. Fremont Ditch Pipe Line & Reservoir 

Co., C. C. A., Ill F., 284, 287. 23 

Milton vs. Hudson R. Steamboat Co., 37 N. Y., 210, 214, 215. 34 

Minnesota vs. Northern Securities Co., 194 U. S., 48, 68.... 14 

Montague & Co. vs. Lowry, 193 U. S., 38. 65 

Murphy vs. Christian Press Ass’n, 38 A. D., 426, 430. .43, 44, 50, 52 

National Fireproofing Co. vs. Mason Builders’ Ass’n, C. C. 

A., 169 F., 259.10, 15, 17 

National Phonograph Co. vs. Schlegel, 128 F., 733, 735, C. 

C. A. 38 

Nordenfeldt vs. Maxim-Nordenfeldt Co. [1894], A. C., 565.. 57 

Northam vs. Dutchess Co. Mut. Ins. Co., 177 N. Y., 74. 22 

Ogilvie vs. Merriam Co., 149 Fed., 858, 862. 43 

Park & Sons Co. vs. Hartman, 153 F., 24.38, 44 

Park & Sons Co. vs. National Wholesale Druggist Ass’n, 

175 N. Y., 1. ....27, 44, 53 

Parsons vs. Sutton, 66 N. Y*, 92. 34 

Parton vs. Prang; opinion of Clifford, /. [3 Cliff., 537]. 43 

Patterson vs. Ogilvie Pub. Co., il9 F., 451, 453. 45 

Penna. R. R. Co. vs. Hughes, 191 U. S., 477. 15 

Pidock vs. Harrington, 64 F., 821. 18 

Pomeroy Equity Jurisprudence, Vol. 1, Secs. 404, 398. 23 


































IV 


Page 

Pope^ys. Terre Haute Car & Mfg. Co., 107 N. Y., 61, 66 .... 22 

Reed vs. Holliday, 19 F., 325. 42 

Reed vs. McConnell, 133 N. Y., 425, 434. 22 

R. S., No. 4884. 39 

R. S., No. 4952.39, 40 

Robinson on Patents, Vol. I, Sec. 824. 38 

Rochester Lantern Co. vs. Stiles & Parker Press Co., 135 N. 

Y., 209, 217 . 34 

Rudell vs. Grand Rapids Cold Storage Co., 136 Mich., 528- 34 

Sherman Act, Secs. 7, 4. 14 

Scherrer vs. Baltzer, 84 Ill. App., 126. 34 

Second Employers’ Liability Cases, 223 U. S., 1 , 55, 56.... 14, 19 

Sedgwick on Damages, Vol. I, Secs. 202 , 143.31, 34 

Southwick vs. First National Bank of Memphis, 84 N. Y., 420 22 

Standard Oil Co. vs. U. S., 221 U. S., 1 , 58.52, 62 

Standard Sanitary Mfg. Co. vs. U. S., 226 U. S., 20 , C. C. A., 

191 F., 172. 52 

State of Missouri vs. Associated Press, 51 L. R. A., 151, at 170 16 

Stevens vs. Gladding, 17 How. (U. S.), 447. 45 

Story vs. Holcombe, 4 McLean, 306. 42 

Straus vs. Amer. Pub. Ass’n, 85 A. D., 460, 177 N. Y., 473.. 4 

Straus vs. Amer. Pub. Ass’n, C. C. A., brief of plaintiffs in 

error, p. 35. 18 

Straus vs. Amer. Pub. Ass’n, 177 N. Y., 473.5, 27, 44, 52 

Gray, J., p. 488. 39 

Straus vs. Amer. Pub. Ass’n, 177 N. Y., 473, opinion of 

Bartlett, J., p. 493. 29 

Swift & Co. vs. Johnson, 138 Fed., 867, 873. 35 

The Conqueror, 166 U. S., 110 . 31 

Toledo Computing Scale Co. vs. Computing Scale Co., C. C. 

A., 142 F., 919. 23 

Tripp vs. Santa Rosa R. R. Co., 144 U. S., 126. 22 

Troxell vs. D. L. & W. R. R. Co., 185 F., 540, 541. 21 

Truesdell vs. Sarles, 104 N. Y., 164. 22 

Uri vs. Hirsch, 123 F., 568, 578. 30 

U. S. vs. Knight Co., 156 U. S., 1 . 18 

U. S.'vs. Reardon & Sons, 191 F., 454, 458. 55 

Verplanek vs. Van Buren, 76 N. Y., 247. 31 

Vencell vs. O. & K. C. R. Co., 132 Mo. App., 722. 34 

Victor Talking Machine Co. vs. The Fair, 123 F., 424, 61 C. C. 

A., 58 . 38 

Warren vs. Stoddart, 105 U. S., 224. 34 

Werckmeister vs. Amer. Lith. Co., C. C. A., 134 F., 321. 40 

West Chicago Street R. vs. Chicago, 201 U. S., 506. 6 

Western Union Tel. Co. vs. Wilson, 213 U. S., 52, 54 . 22 

West Pub. Co. vs. Lawyers’ Co-op. Pub. Co., 64 Fed., 360_ 42 

Worden vs. California Fig Syrup Co., 187 U. S., 516, 528, 530. 30 


































Supreme Court of the Doited States, 

October Term, 1912. 

No. 172. 


Isidor Straus and another com¬ 
posing the firm of R. H. Macy 
& Co., 

Plaintiffs and Plaintiffs 

in Error , 


American Publishers’ Associa¬ 
tion, et al , 

Defendants and Defendants 
in Error. 


In error to the Supreme Court of the State of 
New York. 

brief on behalf of the de¬ 
fendants IN ERROR. 

Statement. 

On Monday, October 19th, 1911, the defendants 
in error moved to dismiss the writ of error or to 
affirm the judgment. The Court directed the mo¬ 
tion to stand over until the argument on the writ 
of error. 

Counsel for the defendants before making gen¬ 
eral argument of the case respectfully submit a 






0 


POINT. 

In reply to the plaintiffs’ “Points 
in opposition to motion to dismiss Writ 
of Error.” 


A. 

In our brief on the motion we contended (at 
page 14) that the Court has no jurisdiction to re¬ 
view the decision of the state courts concerning the 
effect of the copyright act, because the plaintiffs 
in error claimed no title, right, privilege or im¬ 
munity under the copyright act. The defendants 
claimed such a right, privilege or immunity, and 
the decision was in favor of their claim. 

In their Point III the plaintiffs in error say: 

“Even on the defendants’ side it is obvious 
that the decision in this case turned on a 
federal question, and it is argued by the de¬ 
fendants in error that the right asserted by 
them under the copyright laws, though a fed¬ 
eral question, is not available to the plain¬ 
tiffs in error in the Supreme Court to sustain 
jurisdiction, because the federal right which 
the defendants asserted was decided in their 
favor. 

This is unquestionably correct as a general 
rule” (p. 26). 

The learned counsel suggest that the ruling on 
the tenth proposed conclusion of law may be an 
exception to the general rule. 

It is enough to say that no reference to this 
exception is to be found in the assignments of 
error, and therefore the case is governed by the 
general rule, and our Point I is sustained by the 
plaintiffs’ admission. 


3 


B. 

We argued (pp. 16, 17, 18) that the right 
claimed under the Federal anti-trust act in re¬ 
lation to copyrighted hooks which is set forth in 
the assignments of error was never presented to 
the appellate courts by adequate specification. 

This contention is fully sustained by the state¬ 
ment of facts made by the plaintiffs on the motion 
to dismiss. Counsel, without reference to the rec¬ 
ord, describe the purpose, the conduct and the 
result of the appeals. The Federal anti-trust law 
is not referred to, and it is shown that the ques¬ 
tion which the appellants intended to raise was 
the very question which the courts considered and 
decided, namely, whether “the decision of the 
Court of Appeals (177 N. Y., 473) in respect to 
the proper construction of the Federal copyright 
laws should he held to he erroneous.” 

We quote from the brief of the plaintiffs in 
error: 


“Before their appeal (to the Appellate Di¬ 
vision) was heard, this Court had decided 
the case of Bohhs, Merrill Co. v. Straus (210 
U. S., 339), and indeed it was in hope of this 
decision that the appeal of the plaintiffs in 
error to the Appellate Division was takeii. 
The Appellate Division and the Court of Ap¬ 
peals had denied relief to the plaintiffs in 
respect to copyrighted books solely hy reason 
of the construction those courts placed upon 
the copyright laws, namely, * * * 

“The plaintiffs not unreasonably supposed 
that when hy its decision in Bohhs, Merrill 
Co. v. Straus this Court had authoritatively 
determined that the copyright laws of the 
United States did not authorize such an as- 


4 


founding result the Appellate Division and 
the Court of Appeals would be quick to rec¬ 
ognize their error, and, while the case was 
still before them for consideration and open 
to any judicial action they might determine 
to be proper, would grant to the plaintiffs 
the relief for which they prayed in respect to 
copyrighted books also. 

“The Appellate Division, however, by a 
majority vote, affirmed the interlocutory 
judgment in these words: 

“ ‘Judgment affirmed with costs, on the 
authority of 177 N. Y., 473. J Justices Ingra¬ 
ham and McLaughlin dissented, stating in 
their opinion that the whole foundation of the 
previous decision of the Appellate Division 
(85 App. Div., 460) and of the Court of Ap¬ 
peals (177 N. Y., 473) in respect to copy¬ 
righted boohs had been completely over¬ 
thrown by the decision of Bobbs, Merrill v. 
Straus * * *. 

“It is sufficiently obvious that the decision 
of the Appellate Division as a court was 
based on the reasonable ground that as the 
Court of Appeals also had maintained this 
erroneous view of the effect of the federal 
copyright laws, a proper respect for the deci¬ 
sion of the superior tribunal required the 
Appellate Division to leave it to the Court 
of Appeals to change its former opinion. * * * 
The Court of Appeals, when the question cer¬ 
tified from the Appellate Division was pre¬ 
sented to it and argument made as to the 
effect of the decision of this Court in the 
Bobbs-Merrill case upon the previous deci¬ 
sion of the Court of Appeals, refused, by a 
divided court, to change its former decision, 
declaring in effect that even if the decision 
of this Court in the Bobbs-Merrill case 


5 


showed that the views previously expressed 
by the Court of Appeals (177 N. Y., 473) 
were erroneous in respect to the construction 
of the federal copyright statutes —and this 
the Court of Appeals did not admit—still the 
decision in 177 N. Y., 473, was the law of 
this case, and the court would not change it. 
Judge Bartlett, writing for the three dis¬ 
senters out of the seven judges who composed 
the court, took the position that the decision 
in the Bobbs-Merrill case was wholly irre¬ 
concilable with the former decision of the 
Court of Appeals (177 N. Y., 473) in respect 
to copyrighted boohs, and that as the federal 
laws are paramount on this subject, and the 
Supreme Court of the United States is the 
final arbiter of questions arising under those 
laws, its decision should be respected and 
applied (193 N. Y., 502). The Court of Ap¬ 
peals, therefore, by a divided vote, affirmed 
the order.’’ * * * 

Brief of plaintiffs in error, pp. 8, 9, 10. 

(Italics ours.) 

There is . not a word in all this of the Federal 
question set up in the assignments of error. 

The statement establishes beyond peradventure 
our contention that the only question presented 
to the Court of Appeals was whether under the 
proper construction of the copyright act the de¬ 
cision ought to be in favor of the right, privilege 
or immunity specially set up and claimed by the 
defendants under that act. The opinions show 
that the question raised by the assignments of 
error was not considered by the courts. The 
brief shows that no such question was involved in 
the grounds on which the appeal was taken and 


6 


argued. These facts are decisive of the jurisdic¬ 
tion of this Court. 

“It is not enough that there may be some¬ 
where hidden in the record a question, which, 
if raised, would be of a Federal nature. ’ ’ 

Deivey v. Des Moines, 173 U. S., 193, 
199; 

Hamilton Co. v. Massachusetts t 6 Wall., 
632. 


C. 

In Point I of the brief of plaintiffs in error our 
argument at pages 16-20 is not answered in detail 
and no attempt is made to show adequate specifi¬ 
cation of the assigned errors in the appellate 
courts. 

Five cases are referred to: 

In Deivey v. Des Moines, 173 U. S., 193, the 
validity of a state assessment was drawn in ques¬ 
tion on the ground of its being repugnant to the 
Constitution of the United States. 

In C. B. & Q. Railway v. Drainage Commission¬ 
ers, 200 IT. S., 561, the question was as to the 
validity of a state statute under the Constitution 
of the United States. 

In West Chicago Railroad v. Chicago, 201 U. 
S., 506, an ordinance passed under the authority 
of a state was claimed to be repugnant to the 
Constitution of the United States. 

In Harding v. Illinois, 196 U. S., 78, the con¬ 
stitutionality of a state statute was drawn in 
question. 

All these cases fall within the second class of 
cases provided for in R. S., Section 709: 


7 


“It has been frequently held that in cases 
coming within this class, less particularity is 
required in asserting the Federal right than 
in cases in the third class, wherein a right, 
title, privilege or immunity is claimed under 
the United States, and the decision is against 
such privilege or immunity. In the latter 
class the statute requires such right or privi¬ 
lege to be ‘ specially set up and claimed. ’ Un¬ 
der the second class it may be said to be the 
result of the rulings in this Court that if the 
Federal question appears in the record in the 
state court and was decided, or the decision 
thereof was necessarily involved in the case, 
the fact that it was not specially set up will 
not preclude the right of review here.” 

Harding v. Illinois , 196 U. S., 78, 85. 

In Green Bay & Canal Co. v. Patten Paper Co ., 
172 U. S., 58, the Canal Company explicitly 
claimed as the foundation of its alleged rights 
acts of Congress and transactions with the United 
States. 

In all these cases less particularity was re¬ 
quired in presenting the case to the appellate 
courts than in the case at bar and in each of them 
greater particularity was in fact shown. 

In all of these cases a Federal question was in¬ 
volved which, if noticed at all, would be decisive 
of the case. In the case at bar, the plaintiffs 
asserted that the agreement was unlawful 
under both the state and the Federal anti¬ 
trust statute. The Court of Appeals, in 
construing the complaint on demurrer said 
that the agreement was unlawful under the 
state statute, but, because this Court, in Bement 


8 


v. Harrow Co., declared that patent monopolies 
limit the effect of anti-trust statutes, the Court of 
Appeals held that the right of action did not ex¬ 
tend to copyrighted books. Plainly two courses 
were open to the plaintiffs. They might endeavor 
that at a ‘ 4 future period in the litigation the decis¬ 
ion of the Court of Appeals in respect to the 
proper construction of the copyright law (might) 
be held to be erroneous.” This they did. (Brief 
of plaintiff s-in-error p. 8.) Six years of active 
litigation resulted, which can not be continued 
here because the final decision of the state court 
was in favor of the privilege claimed by defend¬ 
ants under the copyright act. 

The plaintiffs might also have asked the court 
to apply the Federal anti-monopoly statute, but to 
do so effectively it was necessary to point out 
some difference between the statutes—to claim for 
the Federal statute some force or effect which the 
state statute did not have. As the combination 
was declared illegal under one statute, there was 
no apparent object in also declaring it illegal un¬ 
der another. 

The court refused relief as to copyrighted 
books not because of any defect of the New York 
statute as compared with other anti-trust statutes, 
but because reasonable exercise of the copyright 
monopoly is not restrained by statutes against un¬ 
lawful monopoly. The leading case of Bement v. 
Harrow Company sustained the patent monopoly 
against the Federal anti-trust act. The plaintiffs 
denied the asserted resemblance between the 
patent and the copyright, but they at all times 
claimed that the state and the Federal anti-trust 
statutes were for the purpose of this action 


9 


equivalent. The court, therefore, was not “bound 
to go further and inquire whether the second 
claim asserted by the plaintiffs in avoidance of 
the defense # * * was well founded.” Nor 

would the admission of the plaintiffs’ claim re¬ 
quire a contrary judgment, since the plaintiffs 
treated the statutes as equivalent and if they are 
equivalent the judgment must be the same. 

“There is nothing to prevent a party from 
waiving a Federal right of this character if 
he chooses to do so, either in express terms 
or as a necessary implication from his man¬ 
ner of proceeding in the cause.” 

Harding v. Illinois, 196 U. S. 78, 88. 

D. 

In Point II counsel claim that because in Be- 
ment v. Harrow Co. this Court held that the Fed¬ 
eral anti-trust act is a good defense in a suit 
brought on a contract void under the act, therefore 
it is a ground of action in the case at bar. 

“It is not sufficient to show that the agree¬ 
ment in question may create a monopoly, may 
be in restraint of trade, or may be opposed 
to public policy. Agreements of that nature 
are invalid and unenforceable. The law takes 
them as it finds them, and as it finds them 
leaves them; but they are not illegal in the 
sense of giving a right of action to third 
persons for injury sustained. 

“And upon such principles it seems equally 
clear that they afford such persons no ground 
for seeking an injunction against injury 
threatened.” 


10 


National Fireproofing Co. v. Mason 
Builders Ass’n., C. C. A. 169 F. 263. 

Counsel argue that plaintiffs did not seek to en¬ 
force the Federal anti-trust statute but only to 
apply it. The distinction seems unimportant in 
view of the authority cited, which holds that in 
cases like the present the Federal statute is 
neither to be enforced, applied nor considered. 

Locker v. Am. Tobacco Co., 121 App. Div. 
443, 458; 195 N. Y. 565. 

And so in Nat. Fireproofing Co. v. Mason Build¬ 
ers' Ass’n, supra, a case like the one at bar, of 
which the Federal Court had jurisdiction by rea¬ 
son of diverse citizenship, the Circuit Court of Ap¬ 
peals for the Second Circuit said: 

* * * “A person injured by a violation of 
the Federal act cannot sue for an injunction 
under it. The injunctive remedy is available 
to the government only. An individual can 
only sue for threefold damages” (169 F., 
263). 

The contention at p. 20 of our former brief was 
not that these decisions are correct, (which is not 
on this motion important), but that they should be 
considered in deciding whether the state courts 
could have reasonably rested their decision upon 
independent grounds of practice or common law 
right, which did not involve the Federal question 
set up in the assignments of error, and some of 
which involved no Federal question. 

The whole discussion has become superfluous if 
we are right in saying that the brief of plaintiffs 


11 


in error shows that counsel did not present or in¬ 
tend to present to the Court of Appeals the Feder¬ 
al question set up in the assignments of error. 

Passing from the motion to dismiss we make 
the following: 


STATEMENT OF ARGUMENT AND 
POINTS ON WRIT OF ERROR. 

The five assignments allege in different lan¬ 
guage the same error, namely: that the court 
erred in sustaining as against the Federal anti¬ 
trust act, the right, privilege or immunity claimed 
by the defendants under the copyright act. 

Manifestly such an error might have arisen 
either from an erroneous construction of the 
copyright law or from not giving due weight to a 
claim of right made by the plaintiffs under the 
Federal anti-trust act. 

As has been pointed out in our brief on the mo¬ 
tion to dismiss, the construction of the copyright 
act was from the beginning to the end of the liti¬ 
gation in the state courts the chief subject of 
controversy and, so far as the appeal from the 
judgments was concerned, the sole matter passed 
upon and decided. The decision as to the effect 
of the copyright law cannot be re-examined, be¬ 
cause it was in favor of the right, privilege and 
immunity claimed by the defendants under the 
copyright law; our contention in this regard, made 
at page 14 of our former brief, is conceded by the 
plaintiffs in error to be “unquestionably correct 
as a statement of the general rule.” (Brief of 
plaintiffs in error on motion to dismiss, p. 26.) 
And no question raised by the assignments of 


12 


error is pointed out as an exception to the general 
rule. 

The sole question in this Court, therefore, is' 
whether the state court erred in deciding against 
a claim by the plaintiffs of a right, privilege or 
immunity under the Sherman Act. We have 
pointed out that the state appellate courts did 
not, in fact, consider such a claim, as appears 
from the opinions, and that the plaintiffs did not 
intend to present such a claim, as appears from 
their brief (supra, pp. 3-5). We have argued that 
no such claim was “specially” made in the trial 
court or, by adequate specification, presented to 
the appellate courts, (brief on motion, pp. 15-20) 
and that there is nothing in the case to excuse the 
lack of adequate specification (supra, pp. 6-9). 

If, nevertheless, we assume that the plaintiffs in 
error made such a claim as is set up in the assign¬ 
ments of error, and further assume that the state 
courts decided against the claim, such a decision 
was not erroneous—first, because the state court 
was not bound to apply the Federal anti-trust 
statute in this case; second, because the plaintiffs 
have come into a court of equity with unclean 
hands and besides are seeking to maintain an 
action when it is manifest that they have suffered 
no actionable damage; third, because the Federal 
act to protect trade against unlawful monopolies 
clearly does not prohibit reasonable enjoyment of 
the copyright monopoly, and fourth, because the 
combination of the defendants was not unlawful 
under the Federal anti-trust act. 


13 


FIRST POINT. 

The omission to apply the Federal 
Anti-Trust Act was not error. 

a) because that act is not applicable in such an 
action as this when brought in a state court; 

b) because the act is not applicable in an equity 
suit brought for an injunction unless the suit is 
brought by the Attorney General; 

c) because the Federal and state anti-monopoly 
statutes cannot be applied to the same subject 
matter in the same action; and 

d) because the complaint did not state facts 
sufficient to constitute a cause of action under the 
Federal anti-trust act or to show that the agree¬ 
ment or combination was in violation of that act. 

A. 

In an action sounding in tort brought in a state 
court and which does not solely relate to inter¬ 
state commerce, the court is not bound to apply 
the Federal anti-trust act. 

This act declares certain contracts illegal, and 
any one sued upon a contract may set up as a de¬ 
fense, that the contract is a violation of an act of 
Congress. 

Bement v. Nat. Harrow Co., 186 U. S., 70. 

But the defendants are not seeking to recover 
upon a contract. 

The act also gives certain remedies in the United 
State Circuit Court to persons injured. 


14 


“It thus appears that the act specifies four 
modes in which effect may be given to its 
provisions. It is clear that the present suit 
does not belong to either of those classes. 
It is not a criminal proceeding (Sections 1, 
2, 3) nor a suit in equity in the name of the 
United States to restrain violations of the 
Anti-Trust Act (Sec. 4), nor a proceeding in 
the name of the United States for the for¬ 
feiture of property being in the course of 
transportation (Sec. 6), nor an action by any 
person or corporation for the recovery of 
threefold damages for injury done to busi¬ 
ness or property by some other person or 
corporation” (Sections 7-8). 

Minnesota v. Northern Securities Co., 194 
U. S., 48, 68. 

By Section 7 of the Sherman Act a person in¬ 
jured in his business or property may sue there¬ 
for “in any Circuit Court of the United States in 
the district in which the defendant resides or is 
found.’’ And see Section 4. 

Jurisdiction is given to the specified Federal 
courts and to no other court, the statute differ¬ 
ing in this respect from those examined in 

Second Employers Liability Cases, 223 
U. S., 1, 56. 

The New York courts had, therefore, no juris¬ 
diction to give relief on the ground that the de¬ 
fendants violated the Sherman Act. 

In Bement v. National Harrow Co., 186 U. S. 
p. 87, it was assumed that a person injured in his 
person or property by acts violative of the Sher¬ 
man Act, must sue in a Circuit Court of the United 


15 


States, in the district in which the defendant re¬ 
sides or is found; and it would seem to follow that 
a state court has no jurisdiction under the act. 

Agreements creating a monopoly in restraint of 
trade and against public policy^ though invalid and 
unenforcible, are not illegal in the sense of giving 
a right of action to third persons for an injury 
sustained, nor as affording ground for an injunc¬ 
tion against threatened injury. 

This was held in a suit closely resembling the 
suit at bar in which the United States Circuit 
Court for the Southern District of New York had 
jurisdiction by reason of diverse citizenship. 

National Fireproofing Co. v. Mason 
Building Association, C. C. A., 169 F., 
259. 

Whether such a suit shall be sustained under 
the common law and the general law of New York, 
such as the suit at bar, ( Brief of plaintiffs in error 
on motion to dismiss, pp. 21, 22) was a question 
for the New York courts to decide. 

Penn . R. R. Co. vs. Hughes, 191 U. S. 477. 

The law of New York relating to these actions 
is as follows: 

“We may eliminate from consideration the 
statutes of the United States, referred to in 
the complaint, because they have no bearing 
upon the cause of action here presented. They 
relate only to matters in restraint of trade 
or commerce between or among the several 
States of the Union or with foreign nations, 
and for a violation of their provisions re¬ 
dress must be sought in the Federal courts, 
which alone have jurisdiction. The common 


16 


law, and the particular statute claimed to 
have been violated by the defendants, viz., 
chap. 690 of the Laws of 1899, commonly 
known as the Donnelly Act, control the de¬ 
termination of the question whether the acts 
alleged support the contention that they are 
illegal and in restraint of trade.’’ 

Locker v. American Tobacco Co., 121 
App. Div. 443, 449—aff’d on opinion 
below, 195 N. Y. 565. 

State of Missouri v. Associated Press , 51 

L. R. A. 170. 

No case has been found in which a state court 
has allowed a recovery based upon the Sherman 
Act or on account of its violation. 

In Point I of their principal brief counsel for 
the plaintiffs in error cite to sustain the jurisdic¬ 
tion of this court only one authority—the case of 
Straus v. American Publishers Association in the 
Court of Appeals for the Second Circuit. 

When Macy & Company filed their writ of 
error in this court they also prosecuted in the 
United States Circuit Court a suit against the 
same defendants to recover under the Sherman 
Act threefold damages for the same alleged tres¬ 
pass set up in the suit at bar. In the defendants ’ 
answer in the Circuit Court the judgment of the 
state court in the suit at bar was set up by way 
of res judicata ; to this Macy & Company replied 

“that the judgment in the State Court was 
not res judicata ** * * because the pres¬ 

ent action was founded on the Federal 
statute under which the State Court had no 
jurisdiction * * *” 

(Brief of plaintiff in error, p. 33.) 


17 


This view was taken by the Court, which said, 
speaking by Judge Ward, 

4 4 The fact that the judgment in the State 
Court depended upon the state statutes and 
that the complaint in this case is founded on 
the Federal statute which is not within the 
jurisdiction of the State Court makes no 
difference” (ibid p. 35). 

Macy & Company having successfully asserted 
in the Circuit Court of Appeals that the state 
court in the suit at bar had no jurisdiction under 
the Sherman Act, now adduce this fact as per¬ 
suasive that the state court had such jurisdic¬ 
tion! We submit that the decision of the Circuit 
Court of Appeals in Straus v. American Pub¬ 
lishers’ Association aids our contention, not only 
as an authority exactly in point, but also on the 
principles which underlie the law of estoppel and 
those which underlie the law of the thing ad¬ 
judged. 


B. 

In a suit for an injunction not brought by the 
Attorney-General, there can be no recovery on the 
ground that a combination is illegal under the 
Federal anti-trust act. 

It was so held when the Federal court had juris¬ 
diction by .reason of diverse citizenship. 

“A person injured by a violation of the 
Federal act cannot sue for an injunction un¬ 
der it. The injunctive remedy is available 
to the government only. An individual can 
only sue for threefold damages.” 

Nat. Fireproofing Co. v. Mason Builders’ 
Ass’n (C. C. A.), 169 F., 259, 263; 


18 


Pidcock v. Harrington, 64 F., 821; 

Greer, Mills & Co., v. Stoller , 77 F. 1, 

and cases cited in onr former brief pp. 20, 21. 

C. 

It was not error to refuse to apply the Sherman 
Act in a suit brought under the New York anti¬ 
trust act, in which an injunction had been 
granted. 

If it be assumed that the American Publishers’ 
Association was illegal under both the New York 
anti-trust statute and the Federal anti-trust stat¬ 
ute and that the plaintiffs had a right to bring a 
suit in equity in the New York courts to enjoin the 
defendants because their agreement violated the 
Federal act, nevertheless the plaintiffs could not, 
with a complaint containing only one cause of ac¬ 
tion, assert their rights under both statutes, be¬ 
cause these relate to different subject matter. 

If we assume that the agreement violated both 
laws, the plaintiff might proceed under either and 
recover all the damages which he had sustained, 
but he was forced to elect. 

1 Straus v. Am. Publishing Ass ’n, C. C. A. 
brief of plaintiffs in Error, p. 35. 

The Federal act could have no application to a 
monopoly in manufacture, production or sale with¬ 
in the State of New York of an article or com¬ 
modity of common use or to the restraint of com¬ 
petition in the State of New York in the supply 
or price of such articles or to a restriction upon 
the free pursuit in the State of New York of the 
lawful business of selling books at retail. 

U. S. v. Knight Co., 156 U. S., 1. 


19 


It was to these matters, wholly within the boun¬ 
daries and the jurisdiction of New York that the 
agreement and combination were adjudged to re¬ 
late. (Record, p. 138). The New York statute, on 
the other hand, is superseded so far as it covers 
the same field with the Federal act. 

Second Employers Liability Cases , 223 

U. S., 1, 55. 

If the combination related to interstate com¬ 
merce there was no cause of action for violation 
of the state law; if it related to intrastate com¬ 
merce (as was adjudged) there was no cause of 
action for violation of the Federal law. 

If the plaintiffs, alleging restraint of interstate 
commerce, had sought to give effect to the Sher¬ 
man Act, they might have raised the question 
whether state courts, unlike the Federal courts, 
must, in a suit not brought by the Attorney-Gen¬ 
eral, grant injunctions against combinations which 
violate the Sherman Act. But when, alleging acts 
within the State of New York restricting the free 
pursuit within that state of the lawful business of 
selling books at retail, plaintiffs sought to give 
effect at once to a statute which solely relates to 
interstate commerce and a statute which solely 
relates to commerce within the State of New 
York, they raised, at most, a question of practice, 
and the court under the inherent right to protect 
itself against confusion and incoherence, could 
say 

“ Whatever your rights under the Sherman Act 
may be, you cannot assert them in this action con¬ 
currently with rights under the Donnelly Act, 
which we are enforcing because you allege and 


20 


prove that the subject matter of your suit falls 
within the exclusive jurisdiction of the State of 
New York.” 


1 ). 

The complaint contained no sufficient allegation 
of facts showing that the combination restrained 
interstate commerce, and therefore an omission to 
give effect to the Sherman Act was not erroneous. 

It was alleged that the members of the Pub¬ 
lishers ? Association did business in different 
states. There is no sufficient allegation that the 
plaintiffs or any of the defendants were engaged 
in interstate commerce. 

The allegation in the complaint relied on is as 
follows: 

“Nineteenth .—That thereafter, and ever 
since May 1st, 1901, the defendants have un¬ 
lawfully, and contrary to the declared policy 
of this State and its statutes, maintained such 
combination whereby competition in this 
State, as well as throughout all the States of 
the United States , in the supply and price of 
books, has been and is restrained or pre¬ 
vented, and whereby the free pursuit in this 
State of the lawful business of selling books 
has been and is restricted or prevented to the 
great injury and damage of these plaintiffs.” 

Record, p. 25. 

The plaintiffs in error rely upon the words 
which we have italicized, but obviously, the whole 
nineteenth paragraph was framed to bring the 
ease within the Donnelly Act and the italicized 
words are surplusage. 


21 


Troxell v. D., L. & W. R. Co., 185 F., 540. 

541. 

Counsel in their brief on the motion to dismiss, 
say, at page 7 

“Any lack of specification in the complaint 
is fully cured by the findings of fact of the 
Trial Court and the propositions of law 
based thereon, presented by the plaintiffs in 
error and decided adversely to them, both 
by the trial courts and by the appellate 
courts.’’ 

And at page 42 of the principal brief they make 
an assertion to like effect. 

But findings of fact did not cure the defects in 
pleading, because a plaintiff can only recover 
secu/ndum allegata et probata. The trial judge was 
not bound to hold that the agreement restrained 
interstate commerce under the Federal anti-trust 
act because that was not duly alleged. If, under 
the liberal power of amendment given by the New 
York Code of Civil Procedure, he might have 
amended the complaint so as to set up a claim 
under the Federal act, he was not bound to do so 
unless the plaintiffs moved for such amendment. 
No amendment was made and none was asked for. 
After judgment there was no power in any court 
to amend a pleading for the purpose of upsetting 
the decision and reversing the judgment. These 
familiar rules are enforced in the New York prac¬ 
tice. 

Bright son v. Claflm Co ., 180 N. Y., 76, 

81; 

Northan v. Dutchess Co. Mut. Ins. Co., 
177 N. Y. 74; 


22 


Truesdell v. Sarles, 104 N. Y. 167; 

Pope v. Terre Haute Car & Mfg. Co., 107 
N. Y., 61, 66. 

Southwick v. First Natl. Bank of Mem¬ 
phis, 84 N. Y. 420; 

Freeman v. Grant, 132 N. Y. 22, 29; 

Reed v. McConnell, 133 N. Y. 425, 434; 
Bradt v. Frank, 164 N. Y. 515, 519. 

The decision therefore rests upon grounds of 
state procedure, with which it is not the province 
of this Court to interfere. 

Western Union Tel. Co. v. Wilson, 213 
U. S. 52, 54; 

Kipley v. Illinois, 170 U. S. 182, 187, 188, 
189; 

Layton v. Missouri, 187 U. S. 356; 

Allen v. Alleghany Co., 196 U. S. 458, 465, 
466; 

Tripp v. Santa Rosa Street Railroad Co., 

144 U. S. 126. 


23 


SECOND POINT. 

It was not error to dismiss the com¬ 
plaint as to copyrighted books because 

(a) The plaintiffs have not come into a 
court of equity with clean hands, and 

(b) It appears that the plaintiffs have 
suffered no actionable damage from the 
acts complained of. 

A: 

The plaintiff does not come into the court of 
equity with clean hands. 

“A court of equity will leave to his remedy 
at law—will refuse to interfere to grant re¬ 
lief to—one who in the matter or transaction 
concerning which he seeks its aid, has been 
wanting in good faith, honesty or righteous 
dealing. While in a proper case it acts upon 
the conscience of a defendant to compel him 
to do that which is just and right, it repels 
from its precincts remediless the complainant 
who has been guilty of bad faith, fraud or 
any unconscionable act in the transaction 
which forms the basis of his suit.” 

Mich . Pipe Co . v. Fremont Ditch Pipe 
Line & R. Co., C. C. A. Ill F. 284, 287. 

1 Pomeroy Equity Jurisprudence, Sec. 
404, 398. 

Medicine Co. v. Wood, 108 U. S. 218, 227. 

Comstock v. Johnson, 46 N. Y. 615. 

Fetridge v. Wells, 4 Abb. Pr. 144. 

Toledo Computing Scale Co. v. Comput¬ 
ing Scale Co., C. C. A. 142 F. 919. 


24 


This suit arises from the defendants’ refusal 
to supply their copyrighted books to Macy & Com¬ 
pany. It is not pretended that any defendant as 
an individual was bound by contract or otherwise 
to sell to Macy & Company. Their alleged rights 
rest solely upon the combination of the de¬ 
fendants. That combination was formed and 
continued, so far as Macy & Company were con¬ 
cerned, solely by reason of their course of dealing 
with the defendants’ copyrighted books within the 
first year after publication. But for that course 
of dealing, the combination would never have af¬ 
fected Macy & Company. If that course of deal¬ 
ing ended the combination ceased to affect them. 

Record, Findings 43-47, 33, pp. 124, 122. 

Macy’s course of dealing with the publishers’ 
copyrighted books was the origin and basis of the 
controversy. It follows that if that course of 
dealing—the use made by Macy & Company of 
the defendants’ copyrighted books within the first 
year after publication—was wanting in good 
faith, honesty or righteous dealing, if it was un¬ 
conscionable, the maxim applies and the plaintiffs 
cannot maintain this suit in equity. Without 
repeating what is said elsewhere, it may be here 
pointed out that the use made by Macy & Com¬ 
pany of new copyrighted books was monopolistic, 
injurious to the publishers and the booksellers 
and fraudulent as regards the public. 

(a) The practice of Macy & Company is monop¬ 
olistic. 

They claim to sell all articles u at a lower fig¬ 
ure than the same article can be obtained any- 


25 


where else” and books in particular “at a cheaper 
price than at other retail book stores.” (Record, 
pp. 15, 134.) As only one dealer can sell cheaper 
than all other dealers, this is equivalent to saying 
that they occupy the position sought by the mon¬ 
opolist of having overcome competition. 

In effect it is asserted that Macy & Company 
have attempted to monopolize and have monopo¬ 
lized a part of trade or commerce. 

To prove their assertion they sell current maga¬ 
zines and new copyrighted books cheaper than 
any other dealer and, if necessary to meet compe¬ 
tition, at less than the wholesale price at which 
they purchase (p. 134). That is to say, they use 
their 

“power to crush existing and threatened 
competition by so slaughtering prices for a 
time as to ruin all who are not parties to the 
combination. ** 

1 Eddy on Combinations , Sec. 329. 

This shows 

“an attempt and purpose to suppress a com¬ 
petitor by underselling him at a price so un¬ 
profitable as to drive him out of business,” 

which is a “badge of monopoly.” 

Message of the President to Congress , 
Dec. 5, 1911. 

(b) Such dealings even by a producer selling 
goods of his own manufacture may be “a badge 
of monopoly,” but Macy & Company dealt, not 
with books of their own manufacture, but with 
books manufactured by the defendants, and the 


26 


result not only tended to monopoly, but was in¬ 
jurious both to the publishers and their custom¬ 
ers, the booksellers. 

This appears from the record, (Finding 92, p. 
133) from the unanimous desire of publishers and 
dealers to establish a fixed price system and from 
the allegations of the complaint (Twelfth to 
Fourteenth, Sixteenth, Twenty-third, pp. 16, 17, 
21), and it appears from all the facts found relat¬ 
ing to the trade of Macy & Company. A book¬ 
seller cannot compete in the sale of magazines or 
new copyrighted books with a dealer who sells 
them at less than cost. The publisher loses by 
the narrowing of his market, by the difficulty of 
selling to the trade books which Macy & Company 
advertise at prices with which dealers cannot com¬ 
pete and by the injury to his own retail business. 

As was said by Judge Edward T. Bartlett in 
this case: 

“The result is a large number of the retail 
dealers in the various kinds of articles thus 
undersold are driven out of business, many of 
them at a time of life when they are unable 
to reinstate themselves in some other calling. 

It also results in great damage to manu¬ 
facturers, producers and wholesale dealers 
who have been driven into insolvency. 

It is, of course, true that the proprietors 
of department stores have the legal right to 
offer to the public goods of any kind at prices 
below production, or indeed, may donate them 
to their customers. 

It is, however, equally true that the manu¬ 
facturers, producers and wholesale dealers 
may say to the men whose policy is thus car¬ 
rying ruin and destruction to their business 



27 


and that of their customers, that if you per¬ 
sist in this disastrous cutting of rates we will 
sever all business connections absolutely. 
These are mutual and inherent rights, in the 
nature of things, so long as self-defense and 
the privilege to> exist survive among men.” 

Straus v. Am. Pub. Assn., 177 N. Y., 473. 

This dissenting opinion was rendered upon de¬ 
murrer to the complaint when the facts as to the 
plaintiffs 9 dealings had not yet been proved, and 
these dealings were not considered in the opinion 
of Parker, C. J. If the defendants had appealed 
from the final judgment as to uncopyrighted 
books they might well have succeeded on this 
ground, and they can now rely upon it for af¬ 
firmance as to copyrighted books under the rule 
laid down in the opinion of the court in Park 
Sons Co. v. National Druggists’ Assn. 

“I am not here going to question the right 
of the big fish to eat up the little fish, the 
big storekeeper to undersell and drive out of 
business the little storekeeper, but I do be¬ 
lieve that the little fellows have the 
right to protect their lives and their business, 
and if they can by force of argument and 
persuasion induce manufacturers to estab¬ 
lish a uniform price for fixed quantities, so 
that they can purchase as cheaply as the 
great merchants, and thus compete with 
them in the retail trade, they have the right 
to do so, and that no court of equity ought 
to interfere and restrain them from the ex¬ 
ercise of this privilege.” 

Park & Sons Co. v. Nat. Druggists’ 
Assn,, 175 N. Y., 1, 14. 


28 


This is the rule of law laid down by the New 
York Court of Appeals and therefore controlling 
in this suit brought in a New York court. 

(c) The dealings of Macy & Company with 
copyrighted books were also a fraud on the pub¬ 
lic. 

All the copies of an edition of a newly pub¬ 
lished copyrighted book are equivalent, and so 
are all the copies of a current magazine. 

A copy bought at Macy’s is just as desirable 
and valuable as a copy bought elsewhere. Hence, 
if Macy & Co. undersell all competitors in maga¬ 
zines of the current month, and new copyrighted 
books, they establish beyond cavil a standard of 
cheapness. To accomplish this they advertise 
and sell these articles at lower prices than others 
receive, and they make such sales even if the 
dealings are wholly unprofitable. These bargains 
are not of remnants or shop-worn or unseason¬ 
able articles or goods which for any reason have 
been marked down in price, but they are in new 
goods bought from month to month or day to 
day for the express purpose of being sold at less 
than cost. This practice, so foreign to ordinary 
commercial usage, continues because “ Books are 
merely a peg on which to hang a general story” 
—the false story that other articles are sold more 
cheaply than books. 

This false story is told in many forms. This is 
one of them: 

“Read this Everybody . 

Competitors, when continually undersold, 
indulge in unfair and absurd claims. The 
readiest subterfuge is an attempt to dispar¬ 
age our qualities. When confronted with the 


29 


fact that our prices are lower than theirs, 
they invariably try to explain the beat by 
attacking the character of our goods. How 
about Books? We use them to illustrate be¬ 
cause you know books. They silence criti¬ 
cism. Our rates range from 10 cents to $1.50 
less than others ask for the same books. We 
save you much more on other lines. ’ 1 

Record, p. 135. 

Before these facts came into the case Judge 
Edward I. Bartlett wrote: 

“As an illustration, a dry goods establish¬ 
ment, engaged in selling a vast number of 
articles legitimately related to its business, 
concludes, in order to promote its principal 
trade, to offer for sale books, furniture, drug¬ 
gists’ sundries and numerous other articles 
that need not be mentioned, at cut prices, 
representing only the cost of production and 
oftentimes far below it. The inevitable ef¬ 
fect of this policy is to draw a large number 
of people to these establishments, and in the 
final result the dealer makes good his losses 
in the outside trade by the prices he obtains 
in his legitimate business. 

It may be fairly assumed that the general 
business is conducted at a profit.” 

177 N. Y., 493. 

The purpose of this action is to compel the 
publishers to allow their new copyrighted books 
to be sold by Macy & Co. to the public at less than 
cost as a basis for advertising as follows: 

“on other lines—the ones more difficult for 
inexperienced persons to judge of qualities— 


30 


the price differences in our favor are much 
greater .’ 7 

Record, p. 134. 

In trade mark cases it is held that 

“the plaintiff should not in his trade mark, 
or in his advertisements or business, be him¬ 
self guilty of any false or misleading repre¬ 
sentation; that if the plaintiff makes any 
material false statement in connection with 
the property which he seeks to protect he 
loses the right to claim the assistance of a 
court of equity .’ 7 

Worden v. California Fig Syrup Co., 
187 U. S., 516, 528, 530. 

“Those who come into a court of equity 
seeking equity must come with pure hands 
and a pure conscience. If they claim relief 
against the fraud of others, they must be free 
themselves from the imputation. 

If the sales made by the plaintiff and his 
firm are effected, or sought to be, by mis¬ 
representation and falsehood, they cannot be 
listened to when they complain that by the 
fraudulent rivalry of others their own fraud¬ 
ulent profits are diminished” (Duer, J.). 

Fetridge v. Wells, 13 How. Pr., 388. 

It is set up as a defense that the plaintiffs can¬ 
not maintain this action in equity (p. 36), but 
the defense is available even if not pleaded. 


Uri v. Hirsch, 123 F., 568, 578. 


31 


B. 

The plaintiffs were not damaged by the de¬ 
fendants’ acts. 

The damage is the cause of action and the com¬ 
bination mere matter of aggravation. 

Verplanch v. Van Buren, 76 N. Y., 247, 
259, 260. 

“Only actual damages, established by 
proof of facts from which they may be ra¬ 
tionally inferred with reasonable certainty, 
are recoverable. ’ ’ 

Central Coal & Coke Co. v. Hartman, C. 
C. A., Ill F., 96. 

There must be pecuniary loss. 

The Conqueror, 166 U. S., 110. 

“By consequences which the plaintiff, act¬ 
ing as prudent men generally do, can avoid, 
he is not legally x damaged. Such conse¬ 
quences can hardly be the direct or natural 
consequence of the defendants’ wrong, since 
it is at the plaintiff’s option to suffer them.” 

Sedgwick on Damages, Sec. 202. 

The controversy between Macy & Co. and the 
publishers was whether the plaintiffs should make 
an ordinary profit or a profit smaller than is usual 
in the trade. The defendants wished the plain¬ 
tiffs to make a profit by selling at the market 
price. The plaintiffs preferred to make a smaller 
profit, or a loss, by selling at a lower price than 
any other dealer. 

Macy & Co. could at all times have purchased 
the defendants’ copyrighted books on the most 


32 


favorable terms to sell at market prices. Find¬ 
ing 33, Record, p. 122, 45, 46, 47, p. 124. 

By so doing they would have increased their 
profits. To obtain books from the defendants 
they were not obliged to make any unlawful 
agreement or to join any association; indeed, they 
were not eligible to membership in the American 
Publishers’ Association. The only condition im¬ 
posed was that in selling defendants’ copyrighted 
books they should for one year after publication 
make a larger profit than they were accustomed 
to make, being the profit universally made by re¬ 
tail dealers. The acts of the defendants did not, 
therefore, cause pecuniary loss to the plaintiffs, 
and, if wrongful, at most constituted injuria sine 
damno. 

If the plaintiffs sustained loss it was a con¬ 
sequence of their own wilful act. This more 
fully appears from the specific findings made 
by the Court to show the nature of plaintiffs’ 
dealings in copyrighted books. The plaintiffs, for 
twenty-two years, sold the defendants’ magazines 
so much below the market price that the actual 
loss, in addition to expenses of sale, was three 
cents on each copy. Record, p. 134. 

Obviously the plaintiffs suffered no legal dam¬ 
age from the interruption of this business, but, 
on the contrary, received pecuniary advantage. 

Authors & Newspaper Assn. v. O’Gor¬ 
man Co., 147 F., 616, 621. 

So the plaintiffs to meet competition sold new 
copyrighted books at retail at less than the whole¬ 
sale price which they paid therefor. Record, p. 


33 


134. Obviously the plaintiffs were pecuniarily 
benefitted by the prevention of such dealings. 

The typical transaction and the one which 
caused the defendants to refuse to make further 
sales to the plaintiffs is shown in Findings 43-47, 
at pag'e 124. The copyrighted book ‘ ‘ Tarry Thou 
Till I Come” was published by the Funk & Wag- 
nals Company to be sold at retail at the 
net price of $1.40. The plaintiffs sold it at 
$1.24, and refused a request to sell it at 
$1.40. It is not suggested that they would 
have met with any difficulty in selling at 
the net price. They preferred to sell at a 
price lower than the market price which 
they could obtain as all other dealers did. They 
refused to take the books unless they could sell 
at 16 cents per volume less than the market price. 
The purpose and the natural effect of the defend¬ 
ants’ act was to increase the plaintiffs’ profit. 
The plaintiffs could suffer loss only by wilful re¬ 
fusal to deal with the defendants on the terms 
offered by them. Even if the defendants’ act was 
wrongful the plaintiffs thereby suffered no 
pecuniary damage. 

There is no allegation or proof of special dam¬ 
age and by the general rules of law a refusal to 
sell goods except upon terms which increase the 
vendee’s profit is not actionable. A plaintiff can¬ 
not recover for losses prevented or gains in¬ 
creased. Courts give no remedies for self-im¬ 
posed injuries. The suitor to whom compensation 
is awarded for injury to business is the normal 
man, who trades to make profit and avoid loss; 
who sells for the best price obtainable; who con¬ 
ducts his business according to the rules which 


34 


commonly prevail among prudent people. A man 
cannot recover in tort for injury resulting from. 
4 ‘his abnormal and peculiar mode of doing his 
business. ’’ 

1 Sedgwick on Damages, Sec. 143. 

Even if the defendants had broken a contract 
to furnish the books, the plaintiffs could not re¬ 
cover damages caused by their refusal to accept 
the goods when offered on reasonable conditions 
—and conditions willingly observed by the whole 
trade are presumptively reasonable. 

Warren v. Stoddart, 105 U. S., 224*, 

Parsons v. Sutton, 66 N. Y., 92; 

Lawrence v. Porter, 63 F., 62; 

Hamilton v. McPherson, 28 N. Y., 72, 76, 
77; 

Rochester Lantern Co. v. Stiles <£ Parker 
Press Co., 135 N. Y., 209, 217; 

Brown v. Weir, 95 App. Div., 78; 

Milton v. Hudson River Steamboat Co., 
37 N. Y., 210, 214, 215; 

Ashley v. Rocky Mountain Bell Tel. Co., 
25 Mont., 286; 

L. & N. R. Co. v. Sullivan Timber Co., 
138 Ala., 379; 

Scherrer v. Baltzer, 84 Ill. App., 126; 

French v. Vining, 102 Mass., 132; 

Rudell v. Grand Rapids Cold Storage 
Co., 136 Mich., 528; 

Vencell v. 0. & K. C. R. Co., 132 Mo. 
App., 722; 

Dobbins v. Duquid, 65 Ill., 464. 


35 


If, under Hadley v. Baxendale, a vendee’s no¬ 
tice of the use which he intends for the goods 
binds the vendor, it must equally bind the vendee 
himself. If a bookseller asks for “Tarry Thou 
Till I Come,” to be offered for sale by him at a 
certain profit, and the publisher tenders the book 
on the same terms on which it is offered to all other 
such dealers, which will give the bookseller a profit 
on each book greater by sixteen cents, the book¬ 
seller suffers no pecuniary injury. He must ac¬ 
cept the offer or forego his action against the 
vendor for damages. 

“Of course he was not obliged to buy that 
stock, but the opportunity to buy it served to 
fix and limit the damage he suffered by rea¬ 
son of defendant’s refusal to deliver.” 

Joseph v. Sulzberger, 136 App. Div., 499, 
508. 

There is here no claim or suggestion of special 
damage. 

“The law, in confining the compensation 
to the pecuniary loss, does not run along the 
lines of the imaginary and the possible, but 
rather along the lines of the actual and the 
probable, and therefore the reasonable ex¬ 
pectation must be made to appear by the evi¬ 
dence. Conjecture, speculation and fancy 
cannot supply the absence of evidence or 
avoid the effect of evidence which is pre¬ 
sented.” 

Swift & Co. v Johnson, C . <7. A., 138 F., 

867, 873. 


36 


THIRD POINT. 

Notwithstanding the Federal anti¬ 
trust act it is lawful for a publisher 
when selling, at wholesale, books copy¬ 
righted by him, to fix, by agreement 
with the purchasing bookseller, the re¬ 
tail price at which such copyrighted 
books shall be sold during a period of 
one year. 

The rules of the American Publishers’ Associa¬ 
tion here in question which were in force at the 
time of filing the answers were as follows: 

“I.—That the members of the American 
Publishers’ Association agree that all copy¬ 
righted books first issued by them after May 
1,1901, shall be published at net prices, which 
it is recommended shall be reduced from the 
prices at which similar books have been is¬ 
sued heretofore; provided, however, that 
there shall be exempt from this agreement 
all school books, books published by subscrip¬ 
tion and not through the trade, such other 
books as are not sold through the trade; also 
at the desire of the individual publisher, any 
new edition, any work of fiction or any 
juvenile. 

“II.—lit is recommended that the retail 
price of a net book, marked net, be printed on 
a paper wrapper covering the book. 

“III.—That the members of the Associa¬ 
tion agree that copyrighted books shall be 
sold by them to those booksellers only who 
will maintain the retail price of such net 
copyrighted books for one year, and to those 


37 


booksellers and jobbers only who will sell 
their copyrighted books, except at retail, to 
no one who cuts such net prices’’ (pp. 39, 40, 
41, 66, 67, 119). 

Rule IV provided that works of fiction might 
be sold at retail for a discount not exceeding 28 
per cent, from the fixed price. This is a mere 
modification of the net price rule and does not re¬ 
quire separate discussion. 

Without doubt a patentee may, when selling his 
patented article, impose by agreement with the 
vendee a restriction as to the price at which the 
article may be thereafter sold. 

“ Notwithstanding these exceptions, the gen¬ 
eral rule is absolute freedom in the use or 
sale of rights under the patent laws of the 
United States. The very object of these laws 
is monopoly, and the rule is, with few excep¬ 
tions, that any conditions, which are not in 
their very nature illegal with regard to this 
kind of property, imposed by the patentee 
and agreed to by the licensee for the right 
to manufacture or use or sell the article, will 
be upheld by the courts. The fact that the 
conditions in the contracts keep up the mon¬ 
opoly or fix prices does not render them 
illegal. * * * 

“But that statute [the Sherman Act] 
clearly does not refer to that kind of a re¬ 
straint of interstate commerce which may 
arise from reasonable and legal conditions 
imposed upon the assignee or licensee of a 
patent by the owner thereof, restricting the 
terms upon which the article may be used 
and the price to be demanded therefor. * * * 

“The owner of a patented article can, of 


38 


course, charge such price as he may choose, 
and the owner of a patent may assign it or 
sell the right to manufacture and sell the 
article patented upon the condition that the 
assignee shall charge a certain amount for 
such article. ’ ’ 

Bement v. Nat. Harrow Co., 186 U. S., 
70, 91, 92, 93. 

See also: 

Henry v. Dick Co., 224 U. S., 1, 31, 39, 43, 
44, 45, 46, 47. 

Victor Talking Mach. Co. v. The Fair, 
123 F., 424, 61 C. C. A., 58; 

Nat. Phonograph Co. v. Schlegel, 128 F., 
733, 735, C. C. A.; 

Robinson on Patents, Sec. 824; 

Edison Phonograph Co. v. Kaufma/nn, 
105 F., 960; 

Park & Sons v. Hartmann, C. C. A., 153 
F., 24; 

Edison Phonograph Co. v. Pike, 116 F., 
863; 

and cases cited at page 38, 224 United States 
Reports. 

The rule applies also in copyright cases. 

In the case at bar Chief Judge Parker, speak¬ 
ing for the New York Court of Appeals, quoted 
the sentence first above copied from Bement v. 
National Harrow Co., and continued: 

# 4 ‘That reasoning is employed as to patent 
rights. It is equally applicable to copyrights, 
the protection of which was perhaps the lead- 
ing object of the Association and agreement 
attached in this action” (Straus v. Am. Pub. 


39 


Asso., 177 N. Y., 473, 477; opinion of Gray, 
J., 488, 489; opinion of Gray, J., speaking for 
the court on the second appeal; Record, p. 
184). 

Patents and copyrights exist under the con¬ 
stitutional provision which empowers Congress 

“To promote the progress of science and 
the useful arts by securing for limited times 
to authors and inventors the exclusive right 
to their respective writings and discoveries. * 1 

Constitution , Art. 1 , Sec. 8, Sub. 8. 

Congress, by Title LX. of the Revised Statutes, 
(in force when the judgment herein was entered) 
protected these allied rights by similar statutes, 
which, in regard to the point now in question, 
employ almost the same words. 

A patent gives the “exclusive right to make, 
use and vend the invention.” (Section 4884.) 
A copyright gives the i ‘ sole liberty of printing, 
• * * publishing * # * and vending’ ’ the copy¬ 
righted article. (Section 4952.) 

The monopoly of making and vending the 
patented article and the monopoly of printing and 
vending the copyrighted article are given in equiv¬ 
alent language and by ordinary rules of interpre¬ 
tation are equivalent. 

It is only in the “field of use” that the mono- 
olies differ. The patentee has the exclusive right 
to * * * use * * * the invention. 

The copyright owner has the 

“sole liberty of * * * publishing, completing, 
copying, executing, finishing * * * the book, 
map, chart, etc., and in the case of a dramatic 
composition, of publicly performing it or 


40 


causing it to be performed or represented by 
others; and authors or their assigns shall 
have exclusive right to dramatize and trans¬ 
late any of their books for which copyright 
shall have been obtained under the laws of 
the United States.” 

R. 8., Sec. 4952. 

“Each and all of these statutory rights 
should be given such protection as the act of 
Congress requires, in order to secure the 
rights conferred upon authors and others en¬ 
titled to the benefit of the act.” 

Bobbs-Merrill Co. v. Straus, 210 U. S., 
339, 348. 

The patent law gives a complete monopoly and 
the copyright law a partial monopoly of the 
“field of use.” A reason for this distinction 
is that copyright is given only on condition that 
there is publication of the copyrighted article. 
Publication gives to the public a right to make 
certain uses of the book and the monopoly in the 
“field of use” conferred by the copyright can, at 
most, extend to what is left after the rights of the 
public gained by publication are protected. 

“ Eestrictions imposed upon the use prior 
to publication protect the copyright. Such 
restrictions imposed after publication cannot 
affect the public rights acquired by publica¬ 
tion. * * * The same distinctions are ob¬ 
served and the same rules applied in the 
cases where statutory copyright has been ob¬ 
tained.” 

Werchmeister v. Am. Lith . Co., C . C. A., 
134 F., 321. 


41 


Publication of a book implies the distribution 
of copies. The owner of a copy has the unre¬ 
stricted right to read it, sell it, bind and rebind it 
{Kipling v. Putnam, 120 Fed. Rep., 634, C. C. A.) 
and also a right to make use of its contents for 
purposes of criticism, quotation and the prepara¬ 
tion of other works; this latter right not being 
unlimited, but restricted and defined by the de¬ 
cisions of the courts concerning the “fair use” 
of copyrighted books. 

“The sole liberty of printing, reprinting, pub¬ 
lishing, completing, copying, executing, finishing 
and vending,” is in short the sole right to multiply 
and vend. 

Henry v. Dick Co., 224 U. S., 1, 46. 

The right to dramatize a work, or publicly to 
perform a play or musical composition is a right 
to use. The right to translate, to make extracts, 
to copy for purposes of criticism or in the prep¬ 
aration of another work is in a sense a right to 
multiply copies, but it may also be considered a 
right to use. 

The word “use” is frequently employed in the 
act in force July 1, 1909, 

Copyright Law, §§1 (e), 2, 6, 7, 25 (e), 
31 (proviso). 

Most copyright litigation relates to the field of 
use. 

“In the law of copyright, piracy is the use 
of literary property in violation of the rights 
of the owner. The meaning of infringement 
is the same.” 

Drone on Copyright, 383. 


42 


Certain uses of the copyrighted book are 
held to be lawful. All other use is within the 
exclusive control of the owner of the copyright. 

The line between “fair” and “unfair” use— 
the use permitted by the act of publication, and 
the use reserved in spite of publication—has beeu 
drawn in many cases in connection with differ¬ 
ent subjects, such as Criticism, Quotation, 
History, Biography, Abridgments, Translation, 
Dramatization, Treatises, Directories, Diction¬ 
aries, Catalogues. 

Drone on Copyright, 387-399, 433, 467. 

The cases show that in the field of use, as in the 
broader field of use under the patent law, the 
owner of a copyright may farm out such part as 
he pleases and may retain the remainder, and con¬ 
tracts making such division are lawful. 

“The same rule should be applied to a 
copyright as to a patent for a machine.” 

Story v. Holcombe, 4 McLean, 306; 

The courts have followed the patent cases 
whenever applicable. 

MacgiUivray on Copyright, 281, 282; 

Callaghan v. Myers , 128 U. S., 617; 

Reed v. Holliday, 19 Fed. Bep., 325; 

List Pub. Co, v. Keller, 30 Fed., 772; 

Gilmore v. Anderson, 38 Fed., 846; 

Harper Bros . v. Donohue, 144 Fed., 491, 
492; 

West Pub. Co. v. Laivyers y Co-op. Pub. 
Co., 64 Fed., 360; 

Harper v. Ranous, 67 Fed., 904; 


43 


Daly v. Webster , 56 Fed., 483, 488, C. C. 
A.; 

Ogilvie v. Merriam Co., 149 Fed., 858, 
862; 

Doan v. Am. Booh Co., C. C. A., 105 
Fed., 772, foot of 776. 

The differences between the copyright act and 
the patent law are, however, found solely in what 
in patent law is the field of use. In the field of 
making and the field of sale the statutory provis¬ 
ions are the same, and hence the right of vending 
is the same under both statutes. 

The owner of the copyright may make a valid 
contract with his publishers as to the selling price 
of copies of the copyrighted article. 

Drone on Copyright, 365; 

Murphy v. Christian Press Assn., 38 
App. Div., 426, 430. 

It was said by Judge Clifford in Parton v. 
Prang (3 Cliff., 537): 

“Personal property is transferable by sale 
and delivery, and there is no distinction in 
that respect, independent of statute, between 
literary property and property of any other 
description. * * * Sales may be absolute or 
conditional, and they may be with or without 
qualifications, limitations and restrictions, 
and the rules of law applicable in such cases 
to other personal property must be applied 
in determining the real character of a sale 
of literary property.” 

And see 

Hudson v. Patten, 1 Root (Conn.), 133; 


44 


Aronson v. Baker, 43 N. J. Eq., 365, 369; 

Park v. Nat. Wholesale Brag gists’ Assn., 
175 N. Y., 1, 19. 

This case, with Straus v. American Publishers’ 
Association, 177 N. Y., 473, are discussed in John 
D. Park & Sons v. Hartman, 153 Fed., 24, 35, 36. 

Judge (now Mr. Justice) Lurton, speaking for 
the Circuit Court of Appeals, said: 

“There are such wide differences between 
the right of multiplying and vending copies 
of a production protected by the copyright 
statute, and the rights secured to an inventor 
under the patent statutes, that the cases 
which relate to the one statute are not alto¬ 
gether controlling as to the other’’ (see 
Bobbs-Merrill Co. v. Straus (C. C. A.), 147 
Fed., 15, 23). 

“Nevertheless the statutory right to ex¬ 
clusively publish and vend copies of a copy¬ 
righted production would seem to take direct 
contracts between the publisher and his 
vendees in respect to the price at which sub¬ 
sequent sales shall be made outside of the 
rule as to restraints of trade which might 
otherwise apply.” (Citing Murphy v. Chris¬ 
tian Press Assn., supra.) 

The headnote is in part as follows: 

‘ ‘ The exemption from the common-law rule 
against monopoly and restraint of trade, and 
the provisions of the federal anti-trust act 
of July 2, 1890 (26 Stat., 209, c. 647), which 
has been extended to contracts affecting the 
sale and re-sale, the use or the price of arti¬ 
cles made under a patent, or productions cov¬ 
ered by a copyright, does not extend also to 


45 


articles made under a secret process or medi¬ 
cine compounded under a private formula’* 
(153 Fed., 24). 

The words which we have italicized are ex¬ 
actly in point in the case at bar. If the law was 
so stated, notwithstanding the decision, of the Cir¬ 
cuit Court of Appeals in the Bobbs-MerriU case, 
the statement more plainly is the law, in view of 
the decision of this Court in that case, holding 
that copyright is a sole right to vend, as well as a 
right to multiply copies. 

That an owner of copyright is not, on the sale 
of a copyrighted article, necessarily divested of 
all his statutory rights in regard to it, but only of 
such rights as he conveys, appears from 

Cooper v. Stephens (1895), 1 Ch., 567; 

Marshall & Co., Ltd., v. Bull., Ltd., 85 
Law Times Rep. 77, 82; 

Patterson v. Ogilvie, 119 Fed., 453; 

Stevens v. Gladding, 17 How., 447. 

In the case at bar in the New York Court of 
Appeals on the second appeal Judge Willard 
Bartlett delivered a dissenting opinion, in which 
two judges concurred. They voted, on the au¬ 
thority of Bobbs-Merrill Co. v. Straus, 210 U. S., 
339, to reverse the decision of the Court of Ap¬ 
peals theretofore made. 

Judge Bartlett said: 

“The fair import of the decision is that the 
owner of a copyright obtains nothing as such 
under the Federal law but the exclusive right 
to publish and multiply copies of the pro¬ 
tected work and vend the same. When he 


46 


sells copies, the contracts of sale are unaf¬ 
fected by the copyright statutes, but are 
subject to the same rules of law as those 
which apply to contracts for the sale of other 
personal property.” 

Record, p. 188. 

We respectfully submit that the learned judge 
misapprehended the effect of the decision which 
he cited. In the Bobbs-Merrill case this Court 
carefully limited the decision to the facts, saying: 

“In this case the stipulated facts show 
that the books sold by the appellant were 
sold at wholesale, and purchased by those 
who made no agreement as to the control of 
future sales of the book , and took upon them¬ 
selves no obligation to enforce the notice in 
the book undertaking to restrict the retail 
sales to a price of one dollar a copy . 

The precise question therefore in this case 
is, does the sole right to vend (named in 
§4952) secure to the owner of the copyright, 
the right after a sale of the book 
to a purchaser, to restrict future sales 
of the book at retail, to the right to 
sell it at a certain price per copy, 
because of a notice in the book that a sale 
at a different price will be treated as an in¬ 
fringement , which notice has been brought 
home to one undertaking to sell for less than 
the named sum. We do not think the statute 
can be given such a construction, and it is 
to be remembered that this is purely a ques¬ 
tion of statutory construction. There is no 
claim in this case of contract limitation, nor 
license agreement controlling the subsequent 
sale of the book ,} (p. 350). 


47 


The Court also said (at page 345): 

“We may say in passing, disclaiming any 
intention to indicate our views as to what 
would be the rights of parties in circum¬ 
stances similar to the present case under the 
patent laws, that there are differences be¬ 
tween the patent and copyright statutes in 
the extent of the protection granted by 
them. * * * 

The learned counsel for the appellant in 
this case in the argument at bar disclaims 
relief because of any contract , and relies 
solely upon the copyright statutes and rights 
therein conferred. The copyright statutes 
ought to be reasonably construed with a view 
to effecting the purpose intended by Congress. 
They ought not to be unduly extended by ju¬ 
dicial construction to include privileges not 
intended to be conferred, nor to be narrowly 
construed as to deprive those entitled to the 
benefit of the rights Congress intended to 
grant. ’ ’ (Italics ours.) 

It appears on the face of the opinion 

1. That the question of the validity of a con¬ 
tract between the copyright owner and the vendee 
of the copyrighted article was not passed upon. 

2. That the authority of patent decisions in 
copyright cases where the circumstances are sim¬ 
ilar and the applicable statutory provisions are 
equivalent was not questioned. 

3. That the authority of Bement v. National 
Harrow Co., 186 U. S., 70, was not shaken. Of 
this case Mr. Justice Day, speaking for the Court, 
says: 


48 


“In Bement v. National Harrow Co., 186 
U. S., 70, the suit was between the owners of 
the letters patent as licensor and licensees 
seeking to enforce a contract as to the price 
and terms on which the patented article 
might be dealt with by the licensee. 

The case did not involve facts such as in 
the case now before us, and concerned a con¬ 
tract of license sued upon in the state court, 
and, of course, does not dispose of the ques¬ 
tion before us” (210 U. S., 345). 

The case at bar is distinguishable from the 
Bobbs-Merrill Case on precisely the same 
grounds as the Bement Case, and the language of 
Mr. Justice Day, in regard to the distinction, may 
be paraphrased as follows: • 

In the case at bar the question is as to the 
validity of a contract between the owner of a 
copyright and his vendee or licensee as to the 
price and terms on which the copyrighted article 
might be dealt with by the vendee. The case does 
not involve facts such as in the Bobbs-Merrill 
Case and concerns a contract of sale or license 
brought in question in the state court, and, of 
course, is not disposed of by the decision in the 
Bobbs-Merrill Case. 

Bement v. National Harrow Co. and Henry v. 
Dick Co. show that when a patentee sells subject 
to conditions a patented article, the contracts of 
sale are affected by the patent statutes and are 
not affected by anti-monopoly laws as are con¬ 
tracts for the sale of other personal property. 
Bobbs-Merrill Co. v. Straus does not hold or im¬ 
ply that this rule does not extend to contracts of 
sale made by a copyright owner with his vendee. 


49 


These views are sustained by Dr. Miles Medical 
Co. v. Park Sons & Co., 220 U. S., 373, 405, and by 
the discussion of the Bobbs-Merrill Case in Henry 
v. Dick Co., 224 U. S., 1, 43-47. 

That was a case relating to the use of a patented 
article. Mr. Justice Lurton pointed out the exact 
scope of the Bobbs-Merrill Case and the difference 
between the copyright and patent statutes in re¬ 
gard to the field of use and said: 

4 ‘There is no collision whatever between 
the decision in the Bobbs-Merrill Case and 
the present opinion. Each rests upon a con¬ 
struction of the applicable statute and the 
special facts of the cases’’ (p. 47). 

There is resemblance between the “exclusive 
right to * * * vend” a patented article and the 
“sole liberty * * * of vending” a copyrighted ar¬ 
ticle. No difference between a patented article 
and a copyrighted article is pointed out in the 
Bobbs-Merrill Case or has been suggested in this 
case which tends to prevent the principle of the 
Bement Case and the Dick Case from being ap¬ 
plied to the case at bar. 

Judge Willard Bartlett in his dissenting opin¬ 
ion ( Record, pp. 187, 193 N. Y., 496, 499) says: 

“On the other hand, Mr. Justice Day, writ¬ 
ing for the Supreme Court of the United 
States in the Bobbs-Merrill case, expressly 
declares that there are differences between 
the patent and copyright statutes in the ex¬ 
tent of the protection granted by them, and 
cites with approval an opinion by Circuit 
Court Judge Lurton, in which he said that 
these differences are so wide ‘that the cases 


50 


which relate to the one subject are not con¬ 
trolling as to the other ’ ” (210 U. S., on p. 
246). 

What Mr. Justice Day cited from the opinion 
of Circuit Judge Lurton was: 

“that the cases which relate to the one sub¬ 
ject are not altogether controlling as to the 
other. ’ * 

The omission of the word “altogether” es¬ 
sentially changes the meaning of the passage. If 
decisions in patent cases are not controlling in 
copyright law it might well be argued that the 
Court of Appeals erred in following the Bement 
Case. 

Judge Bartlett quotes from Murphy v. Chris¬ 
tian Press Ass. Pub. Co., 38 App. Div., 430, as 
follows: 

“We suppose that the author of a new 
geometry may fix the price at which he will 
sell his work at any time, or arrange with 
others for its publication and sale at the 
stipulated price. But if all the publishers of 
books on geometry were to combine and 
agree not to sell any publication on that sub¬ 
ject, except for a stipulated price, the con¬ 
tract would be in restraint of trade, and 
void . 9 9 

The members of the American Publishers’ As¬ 
sociation did not agree not to sell books on geome¬ 
try or books on any subject except for a stipulated 
price. Neither the Association nor any member 
of it had anything to do with fixing the price of 
any book except that each member fixed the price 


51 


of his own books. Competition between pub¬ 
lishers was in no way affected by the existence 
of the Association. Each publisher agreed that 
he would fixe a price upon his own book and 
arrange with others for its publication and sale 
at the stipulated prico. That is, he agreed that 
he would make as to each of his books a lawful 
agreement. 


FOURTH POINT. 

The agreement of the American Pub¬ 
lishers* Association was not in violation 
of the Sherman Act. 

It has been argued that each publisher had a 
right to put a retail net price upon each copy¬ 
righted book published by him; that he had a right 
to mark this net price upon the paper wrapper; 
and that he had also a right to sell his copyrighted 
books to those booksellers only who would main¬ 
tain the retail price of such book for one year and 
to those booksellers and jobbers only who would 
sell their copyrighted books except at retail to no 
one who cuts such net prices. 

We shall now argue that each publisher could 
agree with other publishers that he would conduct 
his own business according to this method which 
as an individual he could lawfully pursue. 

It is to be noted that the question has not here¬ 
tofore been considered by any judge or argued 
by counsel in this case. The question comes be¬ 
fore this Court in first instance as well as in last 
resort. 

It may be admitted that all publishers could not 


52 


lawfully agree to fix a price upon all their copy¬ 
righted books on geometry or on any other subject. 

Murphy v. Christian Press Assn., 38 App. 
Div., 426. 

It may also be admitted that the publishers could 
not enter into a combination for the purpose of 
restricting output and destroying competition, or 
refusing to sell their product to jobbers except at 
a price fixed not by trade and competitive condi¬ 
tions, but. by the decision of a committee. 

\Standard Sanitary Mfg. Co. v. U. S. f 226 
U. S., 20. 

C. C. A., 191 Fed., 172. 

On the other hand we claim that all or any of 
the publishers might make rules for regulating the 
conduct of their business among themselves and 
with the public, and providing for just and fair 
dealings among them, provided the regulations 
were made for the legitimate purpose of reason¬ 
ably forwarding personal interest and developing 
trade f without intent to wrong the general public 
or limit the right of individuals, or restram the 
free flow of commerce, or bring about the evils, 
such as enhancement of prices, which are con¬ 
sidered to be against public policy. 

Anderson v. United States, 171 U. S., 604. 

Hopkins v. United States, 171 U. S., 578. 

Standard Oil Co. v. United States, 221 
U. S., 1, 58. 

Straus v. American Publishers Associa¬ 
tion, 177 N. Y., 473, 477, 488, 489, 490, 

491. 


53 


Park & Sons Co. v. Nat. Druggists Assn., 
175 N. Y., 1. 

That some regulation was necessary of the pub¬ 
lishing trade as it existed before the formation of 
the American Publishers ’ Association appears 
from the complaint : 

“Twelfth .—That throughout the said per¬ 
iod the publishers, who also sold and still sell 
at retail, and retail dealers were accustomed 
to advertise and offer the sale of books at re¬ 
tail at certain prices called 4 list prices ’ and to 
deceive the public or those who were not ac¬ 
quainted with the wiles and customs of the 
trade, to induce them to believe that said ‘list 
prices ’ were the ordinary retail prices of such 
books, whereas, in fact, both the publishers and 
the dealers only obtained such ‘ list prices ’ at 
retail from the ignorant and unwary, but gave 
large and liberal discounts from said prices 
at retail to anyone who inquired, or was fa¬ 
miliar with the customs of the trade. 

“Thirteenth .—By reason of such deception 
and lack of uniformity in the price of the same 
book, the purchasing public lost confidence in 
the publishers who sold at retail, and in the 
dealers, and gave their custom to such deal¬ 
ers in books, amongst others, to these plain¬ 
tiffs, as had established fixed prices, and 
where they were assured that the greed of the 
dealer would not attempt to secure an extor¬ 
tionate profit or charge different persons dif¬ 
ferent prices for the same book. 

“Fourteenth .—That by reason of the fore¬ 
going facts the publishers of books who sold 
their own and other publishers ’ books at re- 


54 


tail, and a large number of dealers found their 
business and their profits decreasing . 1 ’ 

Complaint, pp. 16, 17. 

It thus appears by the plaintiffs ’ own statement 
that by reason of 4 4 lack of uniformity in the price 
of the same book” and the fact that dealers could 
“charge different persons different prices for the 
same book” the business of publishers and deal¬ 
ers was diminishing and the public was deceived 
and lost confidence in the trade. It is true that 
this condition of things gave an advantage to the 
owners of department stores who wished to sell 
books at less than a living profit, as an advertise¬ 
ment for their other goods, but this advantage was 
at the expense of the trade. 

“Retail booksellers throughout the country 
were injuriously affected by the competition 
of department stores and mail order houses.” 

Finding 92, p. 133. 

It was, therefore, apparent in the year 1900, 
that, in the interest of the public and of all pub¬ 
lishers, and of dealers and booksellers who sold 
books for profit, it would be advantageous to adopt 
a trade rule prohibiting “lack of uniformity in 
the price of the same book” and providing that 
dealers should not “charge different persons dif¬ 
ferent prices for the same book.” 

Each publisher of copyrighted books could, by 
agreement with the bookseller to whom he sold, 
lawfully fix the retail price at which that book¬ 
seller should dispose of such copyrighted books. 
If all publishers should do this the abuses set 
forth in, the complaint would be prevented. 


55 


This was the origin of the American Publishers ’ 
Association. Its members, for the benefit of the 
public, and of all publishers and booksellers, and 
for their own benefit, agreed that under the pow¬ 
ers given to them under the copyright law they 
would each fix a retail price upon their copy¬ 
righted books for a period of one year after publi¬ 
cation. Regulating trade is not restraining trade. 

U. S. v. Reardon, , 191 F., 454, 458. 

Fonotipia L’t’d v. Bradley, 171 F., 951, 
959. 

Heim v. N . Y. Exchange, 64 Misc., 529, 
531. 

Am. Live Stock Com. Co. v. Chicago Live 
Stock Exchange , 143 Ill., 210. 

The rule complained of was an admirable speci¬ 
men of legitimate trade regulation. It was de¬ 
vised to prevent a recognized evil which affected 
the whole trade and was injurious to the public. 
The rule did not go beyond the evil which it was 
planned to redress. It called upon no member to 
do any act which he could not lawfully perform 
and it had none of those incidents which some¬ 
times make action by a combination unlawful, 
even when every member of the combination 
might individually take it. 

According to the complaint ninety-five per cent, 
of the publishers and ninety per cent, of the book¬ 
sellers in the United States approved the rule (pp. 
11, 13). No one except Macy & Company is al¬ 
leged to have opposed it. It does not appear that 
the public has in any way been injured by the ex¬ 
istence of the American, Publishers Association. 
A trade rule approved by all engaged in a trade 
is presumptively fair and reasonable. 


56 


The rules and the agreement in no way re¬ 
strained the competition which had existed be¬ 
tween the publishers. There was no limitation of 
output or fixing of prices by any common action. 
Each publisher continued to carry on his busi¬ 
ness in unrestricted competition with all others. 
There was no restraint of competition between 
jobbers, there was no attempt to obtain for the 
members of the Association any monopoly. Every 
publisher could become a member of the Associa¬ 
tion. Members of the Association were left free to 
deal under the rules with any publisher and with 
any jobber or bookseller. The general flow of 
commerce was not interrupted. 

The desire of a vendor to vend the articles in 
which he deals on equal terms to all purchasers 
is not immoral. The establishment of a fixed price, 
—a price equal to all purchasers—is a forward 
step in the evolution of commerce and is imposed 
by legislation whenever possible. 

Railroad companies are not allowed to fix their 
rates by agreement with each other, but they are 
by law compelled to charge the same rate for the 
same service without discount or rebate to any¬ 
one. The publishers voluntarily regulated the 
book trade to the same purpose (although to a 
far less extent) that the legislature has regulated 
the trade of common carriers. In each case the 
incidental restraint was to the advantage of the 
public. 

The case at bar is distinguishable from Dr. 
Miles Medical Co. v. Park & Sons Co., 220 U. S. 
373, because the commodity there in question, 
unlike a copyrighted book, was “not entitled to 
special privilege or immunity’’ (p. 408). It was 
said (p. 402): 


57 


[The complainants’] “case lies outside the 
policy of the patent law, and the extent of the 
right which that law secures is not here in¬ 
volved or determined.” 

But if we leave out of consideration the privi¬ 
lege and immunity given by the copyright law, 
there remain distinctions which would validate 
the agreement of the American Publishers’ Asso¬ 
ciation on the facts of this case, under the rules 
laid down in Dr. Miles Medical Co. v. Park & Sons 
Co. The Court, speaking by Mr. Justice Hughes, 
there said: 

“ ‘The true view at the present time,’ said 
Lord Macnaghton in Nordenfelt v. Maxim- 
Nordenfelt Sc. Co., 1904 A. C., p. 565, ‘I think 
is this: The public have an interest in every 
person carrying on his trade freely; so has the 
individual. All interference with individual 
liberty of action in trading, and all restraints 
of trade of themselves, if there is nothing 
more, are contrary to public policy and there¬ 
fore void. That is the general rule. But there 
are exceptions; restraints of trade and inter¬ 
ference with individual liberty of action may 
be justified by the special circumstances of a 
particular case. It is a sufficient justification, 
and indeed it is the only justification, if the 
restriction is reasonable—reasonable that is, 
in reference to the interests of the parties 
concerned and reasonable in reference to the 
interests of the public, so framed and so 
guarded as to afford adequate protection to 
the party in whose favor it is imposed, while 
at the same time it is in no way injurious to 
the public.’ * * * 

“But agreements or combinations between 


58 


dealers, having for their sole purpose the de¬ 
struction of competition and the fixing of 
prices, are injurious to the public interest and 
void. They are not saved by the advantages 
which the participants expect to derive from 
the enhanced price to the consumer/* 

Dr. Miles Med. Co. v. Park & Sons, 220 
U. S., 406, 407, 408. 

The rule of the American Publishers Associa¬ 
tion was “reasonable in reference to the inter¬ 
ests of the parties concerned,” as is shown by the 
plaintiffs ’ allegation that ninety-five per cent, of 
all publishers, and ninety per cent, of all book¬ 
sellers favor the rule. No publisher and no 
dealer except the plaintiff is shown to oppose it. 
The rule is “reasonable with reference to the in¬ 
terests of the public” because there is no proof 
of any increase of prices or other injury to 
the public and on the contrary the complainant al¬ 
leges that the absence of fixed prices was used 
to deceive the public and that by reason “of such 
deception and lack of uniformity in the price of 
the same book, the purchasing public lost confi¬ 
dence and withdrew their patronage. ’ 9 

Record, pp. 16, 17. 

The rule did not have for its “sole purpose 
the destruction of competition and the fixing of 
prices.” The competition among publishers in 
output and price was wholly unrestrained. Each 
retail dealer would be restrained from competing 
as to the retail price of any particular copy¬ 
righted book, but he could sell any other copy¬ 
righted book at its price or any uncopyrighted 


59 


book at any price. The rule was directed not at 
the competition of ordinary dealers, but at the 
illegitimate competition of Macy & Co. The rule 
was “so framed and so guarded’’ as to forbid the 
“lack of uniformity in the price of the same 
book” which both parties admit to be injurious 
to the trade and to the public, and which, there¬ 
fore, for the purposes of this case, the Court 
must hold to be injurious. 

We submit, therefore, that even under the gen¬ 
eral principles of law applicable where there is 
no special privilege or immunity the rule of the 
American Publishers’ Association, so far as the 
facts of this case are concerned, was valid and 
that the court would not be justified in overturn¬ 
ing a trade regulation satisfactory to the whole 
book trade and beneficial to the public, because it 
tended to prevent Macy & Co. from selling books 
at a loss to aid in selling clothing and furniture at 
a profit. 

The American Publishers’ Association was an 
organization formed 

“ to advance the interests of the book pub¬ 
lishing business; to foster the trade and com¬ 
merce of said business and the interests of 
those engaged therein and in its allied trades 
and professions; to reform abuses relative to 
said business ; to secure freedom from unjust 
or unlawful exactions; to diffuse accurate and 
reliable information as to the standing of 
merchants and other matters; to procure uni¬ 
formity and certainty in the custom and 
usages of the trade and commerce of book 
publishing; to settle differences between its 
members and between them and others carry¬ 
ing on business with its members, and to pro- 


60 


mote a more enlarged and friendly intercourse 
in the trade and between business men gen¬ 
erally ; to provide and establish rules and reg¬ 
ulations tending to promote the best interests 
of its members.” (Record, p. 116.) 

Its purposes, on a large scale, resembled 
those with which the Traders’ Live Stock Ex¬ 
change organized the trade of the Kansas City 
stock yards and which were examined in Ander¬ 
son v. United States , 171 U. S., 604. 

We submit that that case controls the case 
at bar. From an opinion which is all applicable 
we quote as follows: 

“It will be remembered that the Association 
does no business itself. Those who are mem¬ 
bers thereof compete among themselves, and 
with others who are not members, for the pur¬ 
chase of the cattle, while the Association itself 
has nothing whatever to do with transporta¬ 
tion—nor with fixing the prices for which the 
cattle may be purchased or thereafter sold. 
Any yard trader may become a member of the 
Association upon complying with its condi¬ 
tions of membership, and may remain such as 
long as he comports himself in accordance 
with its laws. A lessening of the amount of 
trade is neither the necessary nor direct ef¬ 
fect of its formation. * * * There is no fea¬ 
ture of monopoly in the whole transac¬ 
tion. * * * 

‘ ‘ In the view we take of this case we are not 
called upon to decide whether the defendants 
are or are not engaged in interstate com¬ 
merce because, if it be conceded that they 
are so engaged, the agreement as evidenced 
by the by-laws is not one in restraint of that 


61 


trade, nor is there any combination to mo¬ 
nopolize or attempt to monopolize such trade 
within the meaning of the act. 

“It has already been stated in the Hopkins 
Case, above mentioned, that in order to come 
within the provisions of the statute the direct 
effect of an agreement or combination must 
be in restraint of that trade or commerce 
which is among the several states or with for¬ 
eign nations. Where the subject matter of the 
agreement does not directly relate to and act 
upon and embrace state commerce, and where 
the undisputed facts show that the purpose of 
the agreement was not to regulate, obstruct or 
restrain that commerce, but that it was en¬ 
tered into with the object of properly and 
fairly regulating the transaction of the busi¬ 
ness in which the parties to the agreement 
are engaged, such agreement is not within 
the statute, where it can be seen that the char¬ 
acter and terms of the agreement are well cal¬ 
culated to attain the purpose for which it was 
formed and where the effect of its formation 
and enforcement upon interstate trade or 
comnlerce is in any event but indirect and ac¬ 
cidental, and not its purpose or object. * * * 

“The same is true as to certain kinds of 
agreements entered into between persons en¬ 
gaged in the same business for the direct and 
bona fide purpose of properly and reasonably 
regulating the conduct of their business 
among themselves and with the public. If 
an agreement of that nature, while apt and 
proper for the purpose thus intended, should 
possibly, though only indirectly and uninten¬ 
tionally, affect interstate trade or commerce, 
in that event we think the agreement would be 
good,” pp. 614, 615, 616. 


62 


And see 

Standard Oil Co. v. United States, 221 
U. S., 1, 58. 

FIFTH POINT. 

An answer to the brief for plaintiffs 
in error. 

A. 

The statement of the facts (pp. 11-23) is largely 
devoted to facts existing before April 1st, 1904. 
At that date the rules of the American Publish¬ 
ers ’ Association were changed in several respects 
to conform to the decision of the New York Court 
of Appeals on demurrer. The amended rules in 
no way affected dealings in uncopyrighted books 
and no subsequent acts of the defendants relating 
to uncopyrighted books appear in the record. The 
amended rules were set up in the answer. The 
trial court adjudged the agreement and acts prior 
to April, 1904, concerning uncopyrighted books un¬ 
lawful and awarded an injunction and damages 
therefor. No appeal was taken from this part of 
the judgment (Record, pp. 174, 175, 5, 6). There 
was, therefore, in the Court of Appeals and there 
is now no question relating to uncopyrighted 
books. All allusions to uncopyrighted books are 
irrelevant except so far as they enable the Court 
to understand the history of the litigation. 

B. 

The statement of the Federal right set up in 
Point I (a) is not, we think, sustained by the rec¬ 
ord and we refer to our former brief, pp. 16, 17, 
18. 


63 


It is said in Point I ( b ), on page 30, that the 
decision of the Circuit Court of Appeals 

“Must necessarily proceed on the ground 
that the decision and final judgment of the 
Court of Appeals and Supreme Court of the 
State of New York involved a determination 
that the combinations, conspiracies and con¬ 
duct alleged against the defendants did not 
constitute a violation of the federal anti¬ 
trust act.” 

This statement seems to be refuted by Judge 
Ward’s opinion (p. 35): 

“The fact that the judgment in the Stale 
Court depended upon the State statutes and 
that the complaint in this case is founded on 
the Federal statute, which is not within the 
jurisdiction of the State Court, makes no 
difference. The plaintiffs having the option 
to go into either court chose the State Court, 
and their claim having been there adjudicated, 
cannot be presented the second time to any 
other court.’* 

It is said at page 36: 

“The defendants in error claimed in that 
case that the State Court had no jurisdiction 
of an action to recover treble damages under 
Section 7 of the federal act, and that so far as 
the judgments and opinions of the State 
Courts affected any rights of these plaintiffs 
under the federal anti-trust act, such de¬ 
cisions are not binding as authority upon the 
federal courts.” 

This is strangely inaccurate. Not the defend¬ 
ants in error, but the plaintiffs in their reply 


64 


claimed that the state court had no jurisdiction 
under the Sherman Act (Brief of Plaintiffs in 
Error, p. 33). Our position was that Macy & 
Company were estopped from making this denial 
and that the denial was of no consequence 
if true. We never claimed that the judg¬ 
ments of the state courts were not binding as 
authority upon the Federal courts. The state¬ 
ment of the learned counsel in that regard may 
perhaps be due to a misapprehension of this sen¬ 
tence in our brief before the Circuit Court of 
Appeals: 

“We think that the Court of Appeals was 
right and that the error of Judge Bartlett’s 
dissenting opinion has been made manifest 
by the case of Henry v. A. B. Dick Company, 
224 U. S., 1. We do not argue the question, 
because the judgment of the state court is 
offered in this case not as an authority or 
precedent, but as a thing adjudged. As such 
its binding force in this court it is in no way 
dependent upon the correctness of the rea¬ 
soning by which it was reached.’’ 

C. 

In Point II (pp. 37-41) the learned counsel 
base their argument upon the agreements and 
acts prior to April, 1904, relating to uncopy¬ 
righted books. As has been pointed out, the por¬ 
tion of the judgment not appealed from disposed 
of these matters and the argument is therefore 
irrelevant. 

It is also inaccurate at page 41 in saying that 
in 1904 no other change took place in the rules 
except the amendment that they should apply to 
copyrighted books only, and in saying that after 
the amendment the defendants’ “methods were 


65 


continued in precisely tlie same way as thereto¬ 
fore.’ ’ 

In Montague & i Company v. Lowry, 193 U. S., 
38, the essential facts were wholly different. 
There has been no restriction of membership in 
either Publishers ’ or Booksellers 9 Association and 
no restriction of trade to members of either 
association. All publishers may deal freely with 
all dealers, each publisher imposing on each 
sale of copyrighted books, a condition which un¬ 
der the copyright law he may lawfully impose. 

D. 

In Point III there is quotation from Bement 
v. National Harrow Co. It is enough to say that 
if the publishers had by common action fixed the 
price of books published under copyrights owned 
by different publishers they might have made an 
agreement analogous to that escrow agreement 
upon which this Court in the Bement Case de¬ 
clined to express an opinion. If the publishers 
had agreed not to sell their copyrighted books 
except at a price fixed not by trade and competi¬ 
tive conditions, but by the decision of a com¬ 
mittee and had established zones of sales they 
might have brought themselves within the rule 
stated by Mr. Justice McKenna in the Standard 
Sanitary Case. 

But the fixing of prices was left wholly to the 
individual publishers, each fixing the price of his 
own copyrighted books. The agreement that all 
should fix such prices was a lawful trade regula¬ 
tion. There was no limitation as to the persons 
to whom sales were to be made. The agreement 
that each member should refrain from selling at 
wholesale to persons who dealt in copyrighted 
books in violation of the lawful conditions on 


66 


which they were sold by the members of the as¬ 
sociation was analogous to the rules of Ex¬ 
changes, Boards of Trade, Labor Unions and 
other organizations of men engaged in the same 
occupation. 

Arthur v. Oakes , 63 F. 310. 

It is, we think, incorrect to say (p. 50) that the 
agreements controlled the supply, after 1894, of 
all copyrighted books whether published by the 
members of the Publishers’ Association, or not. 
Rule III provided 1 ‘ that the members of the Asso¬ 
ciation agree that copyrighted books shall be sold 
by them to those booksellers only” &c. &c. Plain¬ 
ly this refers to the copyrighted books which 
members of the Association are engaged in selling 
to booksellers. But each publisher sells to book¬ 
sellers the books which he publishes. It does not 
appear that any publisher was also a jobber or 
ever sold to booksellers any book not published by 
himself. Furthermore it is plain that the supply 
to booksellers of the copyrighted books of pub¬ 
lishers who did not belong to the Association 
would continue from them and through jobbers 
unrestrained and uncontrolled by the rules or the 
action of the Association. 

SIXTH POINT. 

If the writ of error be not dismissed 
the judgment should be affirmed. 

All which is respectfully submitted. 

JOHN G. MILBURN, 
STEPHEN H. OLIN. 

Olin, Clark & Phelps, 

Attorneys for the Defendants im Error. 

l.o t it ■- .. o i r. * .... ca . i o '■ j: - 








